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Smell the Fear

Ban Mortgages?

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Let's hear the pros and cons for the following suggestions:

1. Ban mortgages. Pay in cash for houses. Limit property ownership to one per adult in population (maybe 2 max.) The market will adjust to what buyers can actually afford. Debt inflates the cost of homes for no good reason. If we couldn't borrow, surely we would pay less? The poorest who cannot save should be given LA housing as at present.

2. Swiss canton style. I believe they limit ownership to people who actually live in the area. Does anyone have any experience of what this is like in practice?

Housing is a national asset too valuable to be abused by the free market. People need a stable base if they are to be productive and contribute to REAL economic growth.

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Guest wrongmove
1. Ban mortgages. Pay in cash for houses. Limit property ownership to one per adult in population (maybe 2 max.) The market will adjust to what buyers can actually afford. Debt inflates the cost of homes for no good reason. If we couldn't borrow, surely we would pay less? The poorest who cannot save should be given LA housing as at present.

Cons: only the loaded could afford to purchase property. They would then rent it to the rest of us. Rents would be determined by income, just like they are now, so none of us could ever hope to save enough to buy anywhere.

Remember, the loaded have MUCH more money that the average person. They would simply mop up the entire stock.

Banning things rarely works anyway. It just creates a black market. Drugs are banned. Speeding is banned. Does this mean noone takes drugs or exceeds the speed limit?

Get real :ph34r:

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Remember, the loaded have MUCH more money that the average person.

But why would they spend it on houses? Most rich people have no desire to be landlords, there are far more profitable things they can do with their money than rent out two-bed terraces.

I agree that banning would be silly, but it seems fairly clear that mortgages are one of the main causes of today's high house prices: if people had to save to buy houses, prices would be substantially lower.

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Cons: only the loaded could afford to purchase property. They would then rent it to the rest of us. Rents would be determined by income, just like they are now, so none of us could ever hope to save enough to buy anywhere.

Not necessarily.

Without the promise of significant capital growth the rich would seek other ways to invest their money.

Edited by fdk

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Cons: only the loaded could afford to purchase property. They would then rent it to the rest of us. Rents would be determined by income, just like they are now, so none of us could ever hope to save enough to buy anywhere.

Remember, the loaded have MUCH more money that the average person. They would simply mop up the entire stock.

Banning things rarely works anyway. It just creates a black market. Drugs are banned. Speeding is banned. Does this mean noone takes drugs or exceeds the speed limit?

Get real  :ph34r:

Sorry but that is excluded by the rule I suggest that each adult may only own 1 house. This prevents the rich from hoarding houses.

I believe prices would drop to a level where a purchase would be possible for the average person after a few years of hard saving.

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Cons: only the loaded could afford to purchase property. They would then rent it to the rest of us. Rents would be determined by income, just like they are now, so none of us could ever hope to save enough to buy anywhere.

Remember, the loaded have MUCH more money that the average person. They would simply mop up the entire stock.

Banning things rarely works anyway. It just creates a black market. Drugs are banned. Speeding is banned. Does this mean noone takes drugs or exceeds the speed limit?

Get real  :ph34r:

A black market in property.....it's not like a bag of weed you can hide in your sock ffs.

As for "get real" - is there a need to insult? I wouldn't mind if you had made any valid points.

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Remember the mutual organisations known as building societies.

Owned by the members.

Basically members helping each other to be able to buy houses to live in.

Was a good idea.

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I agree that banning would be silly, but it seems fairly clear that mortgages are one of the main causes of today's high house prices: if people had to save to buy houses, prices would be substantially lower.

I don't follow. You agree prices would be substantially lower and that mortgages are one of the main causes of high house prices. Why would it be silly to ban them?

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Guest Charlie The Tramp
Remember the mutual organisations known as building societies.

Owned by the members.

Basically members helping each other to be able to buy houses to live in.

Was a good idea.

Until the Monetarists and the last Tory Government saw rich pickings, just like the utilities and what a c****p it has become. Nothing today is run just for the benefit of the customer.

Profit first, service last.

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Why not just try to operate within the confines of the real world? <_<

So many narrow minded unimaginative idiots around. Is your life determined by a big book of rules on your desk?

If you have a problem with someone who likes to look at problems from different angles and who is willing to test possible solutions I suggest you just go back to ticking boxes or whatever you do all day.

Any suggestion on this website is always taken by a few twats to mean that the poster is fervently in favour of the suggestion. I am just opening it up for discussion. If you have something to say, let's hear it. Otherwise go and heckle somewhere else. <_<

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Guest wrongmove
As for "get real" - is there a need to insult? I wouldn't mind if you had made any valid points.

As insults go it was pretty mild by the standards of this board. And I did actually make two points. (Edited to add: calling people tw@ts is surely more insulting ?)

But apologies anyway.

I just think that banning mortgages is a really stupid idea, and would never happen anyway. Taking the debate down this path is just pointless. Your idea would require a very authoritarian government to implement it, and I would rather be (temporarily?) priced out of housing than have that.

Edited by wrongmove

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A black market in credit, not property 

Money is fairly wasy to trace these days. We could even apply a simple "reasonableness" test. E.g if you have been earning £x for £y years, saving a certain amount may not seem unreasonable.

As for a black market, the rates would likely be high, which would discourage most people (as well as the fact that it is illegal. Suitable penalties would deter).

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Guest Charlie The Tramp

Credit is undoubtedly a source of misery for an increasing number of people, particularly, although by no means exclusively, the less well-off but over the past 30 years, it has also proved to be a force for the good for many others. <_<

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.

I just think that banning mortgages is a really stupid idea, and would never happen anyway. Taking the debate down this path is just pointless. Your idea would require a very authoritarian government to implement it, and I would rather be (temporarily?) priced out of housing than have that.

"stupid idea": not a convincing argument I'm afraid.

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Guest wrongmove
But why would they spend it on houses? Most rich people have no desire to be landlords, there are far more profitable things they can do with their money than rent out two-bed terraces.

The rich have always owned lots of property. By removing the competion, i.e. people who need to borrow, then sure prices would drop. But only enough to boost their yeilds. Not enough for average people to buy.

A yeild of 10% means prices would have to halve. Then the rich would buy. Forget capital growth. How many could buy for cash at even 50% of today's prices ?

The yield would allow them to pay agents.

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The rich have always owned lots of property. By removing the competion, i.e. people who need to borrow, then sure prices would drop. But only enough to boost their yeilds. Not enough for average people to buy.

A yeild of 10% means prices would have to halve. Then the rich would buy. Forget capital growth. How many could buy for cash at even 50% of today's prices ?

The yield would allow them to pay agents.

I suggested a limit on the number of properties an individual can own. 1 person, 1 house. Therefore none of your post would apply.

At 25% of today's prices, I believe most people could buy after a few years of hard saving.

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Guest wrongmove
Money is fairly wasy to trace these days. We could even apply a simple "reasonableness" test. E.g if you have been earning £x for £y years, saving a certain amount may not seem unreasonable.

As for a black market, the rates would likely be high, which would discourage most people (as well as the fact that it is illegal. Suitable penalties would deter).

That's a relief - money laundering doesn't happen either - cos it's banned !!

You get 25 years for murder - it still happens.

What you suggest, i.e. banning mortgages and banning second home ownership just cannot happen in practise . Where would people live while they saved up to buy their houses? You have just banned the rental sector

Think it through. People living in tents while they save for houses. No renting, even if you want to for flexibility. And a very big state to make sure everyone sticks to the rules. The price of housing would be the least of our worries !! :)

Edited by wrongmove

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That's a relief - money laundering doesn't happen either - cos it's banned !!

You get 25 years for murder - it still happens.

What you suggest, i.e. banning mortgages and banning second home ownership just cannot happen in practise . Where would people live while they saved up to buy their houses? You have just banned the rental sector

Think it through. People living in tents while they save for houses. No renting, even if you want to for flexibility. And a very big state to make sure everyone sticks to the rules. The price of housing would be the least of our worries !!  :)

There are enough houses in the UK for us all to live in. If we are only allowed one each, prices will reflect what we can pay. If this system was implemented tomorrow, it would be chaos. But when the dust settled, everyone would still have somewhere to live, as every house has to have an owner. This may mean that at the bottom end some flats change hands for a few hundred quid, as that is all the person at the bottom of the earnings scale can afford to pay. But they would all have somewhere to live.

Obviously social housing could provide accomodation to those who need it.

I'm not saying it would be easy, but this system could be slowly phased in by reducing the earnings multiples available to buy houses slowly. This would ensure that the market could adjust over time to the new rules rather than the chaos of an overnight implementation.

If people were aware of the phasing in, they would be less keen to borrow and prices would slowly slide by this mechanism also.

Edit: as regards murder rates, I'm sure you would agree it would be a lot higher if it was not illegal. Of course you can't completely stop it. But making it illegal with suitable penalties minimises it.

Edited by Smell the Fear

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3 times income max - put a lid on mortgage lending or the banks will end up giving offering 100 times joint income and a terrace in Stoke will end up costing 2.5 million. Deregulation of financial services is shafting everyone except the financial services industry. Is it that drastic an aim to regulate mortgage lending back to how it was in the early 90s? Is this too radical a thing for joe public to cope with? How difficult would minor re-regulation be anyway? I notice several MPs are pushing for this so why don't we join in in supporting them.

Edited by Vivaldo

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the Free market delivers most things pretty well but obviously not housing ...............it's a special case ....Nationalise residential property....

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3 times income max - put a lid on mortgage lending or the banks will end up giving offering 100 times joint income and a terrace in Stoke will end up costing 2.5 million. Deregulation of financial services is shafting everyone except the financial services industry. Is it that drastic an aim to regulate mortgage lending back to how it was in the early 90s? Is this too radical a thing for joe public to cope with? How difficult would minor re-regulation be anyway? I notice several MPs are pushing for this so why don't we join in in supporting them.

It seems too radical for some on here. Apparently we have to keep everything in the world exactly as it is right now or they will suffer a nervous breakdown.

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Guest wrongmove
There are enough houses in the UK for us all to live in. If we are only allowed one each, prices will reflect what we can pay.

You forget that there is a bottom line here: the cost of building a property. Prices cannot fall below that, or else no new houses would be built, supply would slowly dwindle, and there wouldn't be enough houses for everyone to live in.

Obviously social housing could provide accomodation to those who need it.

By social housing, I guess you mean state-owned. The problem would not go away, it would just be a market dominated by an extremely state, rather that an oligarchy of rich individuals.

You are really arguing for communism, or something very similar. IMHO, the side-effects of this would massively outweigh the benefits - massive brain drain, loss of civil liberties etc.

Amusing though it is, I had better stop posting on this thread. I will have to change my name to rightmove and join the bull camp !! I will now go and read some of DrBubb's threads to restrengthen my resolve. :D

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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